Math/Physic/Economic/Statistic Problems
Description
MANAGERIAL ACCOUNTING!!!
Building on the corrections suggested (if any) from Part I, Part II of the term assignment continues with additional analysis of the income statement followed by the Master Budget.
Week 3 Questions:
1) What is the largest expense/cost item on your income statement? Using your annual report (notes to the financial statements) explain what is causing this expense. Can you think of some strategies to reduce this?
2) Take a screenshot of your company’s balance sheet and add this to the Excel worksheet in your assignment excel file. Transfer this data to the worksheet so you can use the data. Make sure you sum together totals where necessary (Example: Total Assets = Current Asset Total + Long Term Asset Total).
Week 4 Questions
Setting up your Given Data Worksheet for your Master Budget
Task 1) Take your company’s revenue total from the income statement and divide by 12. This is your average monthly revenue from the previous year. Take this total and multiply by 1.05 to get your June forecast, multiply by 1.12 to get July’s forecast, multiply by 1.18 to get Augest’s forecast and multiply by 0.8 to get September’s forecast.
With your sales forecast, you now have to assemble the data to make your master budget. Below is a list of the data points you will have to find using your company’s most recent financial statements:
Task 2) From your Income Statement, divide your cost of goods sold by total sales to get the cost of goods sold percentage.
Task 3) Add together the fixed operating expenses from your income statement and divide the total by 12 to get the monthly fixed expense total.
Task 4) Add together the variable operating expenses (excluding COGS) from the income statement and divide this total by the sales revenue total to get your variable expense percentage.
Task 5) Divide the depreciation expense total by 12 to get the monthly depreciation. If you do not have this total on your income statement, go to your cash flow statement in the annual report, depreciation should be listed in the operating cash flows section.
Task 6) Divide the Income tax expense by earnings before income taxes to find the income tax rate.
Task 7) When you calculate interest expense in your capital budget you must use an interest rate. You may find this rate in your annual report, or you can divide your interest expense total from your existing income statement by the long term debt total from your balance sheet.
Important Data to make your Master Budget
1) Sales are 25% Cash and 75% Credit
2) Credit sales are collected 55% next month, 25% in two months, 17% in three months, and 3% are determined to be uncollectible
3) The Account Receivable total from the Balance Sheet is collected 55% next month, 25% in two months, 10% in three months, and 10% is determined to be uncollectible
4) 10% of your Balance Sheet’s Account Payable total is inventory that was purchased on account and will be paid for next month.
5) The inventory rule is to plan to keep 60% of next month’s budgeted cost of goods sold.
6) You set a minimum of 35% of your current Cash total as your minimum cash amount in your bank account.
7) Your bank account accumulates 0.50% interest per month. The bank requires you to make a minimum payment of the monthly accumulated interest.
PART 1 and 2 will be added as additional materials
And you need additional information from Walmart’s actual annual report.
There are 2 main problems, week 3 and week 4
